Why File for a Tax Extension?

In a perfect world, everyone would be efficient and organized and carefully have all their tax information filed away so that when it's time to submit a return, it's all right there. But life is never that simple and for many people, tax season just seems to creep up on them. Before you know it, a year has gone by and it is yet again time to file your return. Tax law is complicated and for many people, filing a return involves digging through paperwork and sorting through a year's worth of papers in order to get all the information and receipts that are required. This is usually done with the last-minute realization that there are penalties for not filing a return or filing a late return.

If you do not get your tax return in by the deadline date, usually April 15, then the IRS's system will pick up that you have failed to submit a return. Initially, you may think that it's not such a big deal. The problem is that in time the IRS will monitor your income. If you continue to not submit returns, you're likely to receive an audit as the tax man wants to know why you're suddenly not paying any tax. On the other hand, when you do eventually submit a return, the IRS will slap you with penalties going back to when you should have first submitted your return. Most people grumble about paying the tax that they do, and having to pay additional penalties on top of that is not a nice feeling. Basically, there is no getting around it. If you earn an income, you need to submit a return at least once a year.

What is a Tax Extension?
A tax extension is a grace period that allows you to delay submitting your return without incurring penalties. If filed electronically, you can get up to an additional six months before having to file your actual return. It's important to note though that although the tax extension delays the deadline for submitting your return, it does not automatically extend the deadline for payment of taxes. Be aware that once submitted, if you do have to pay in tax, be prepared to do so within a relatively short period of time.

How do you File for a Tax Extension?
There are several ways in which you can file for a tax extension. The most convenient way is to simply go online with the e-filing system and apply for an extension. In addition to the IRS site, there are also approved tax-filing vendors that can help you apply for a tax extension online. The procedure is quite simple. You will need to complete your name, address and social security number. The system will then generate a form. On the form, you will need to complete your estimated income for the last fiscal year and the amount of tax you estimate you need to pay. It usually also asks for any amounts of tax that you have already paid plus what you estimate the difference to be. In other words, the amount of tax you want to pay now, if any. Once you have submitted the application, you will get electronic confirmation that the extension application has been received, as well as notice whether your application has been successful or not.

A second way to apply for a tax extension is to use traditional mail. After completing the applicable forms, simply mail them off to the IRS. The information required will be the same as for the electronic application process.

The last way to get a tax extension is to pay a part of your taxes by the return deadline. You can make the payment by credit card online or by calling one of the certified service providers. After making a payment or partial payment, you will still need to complete the required tax extension application form.

The Benefits of Applying for a Tax Extension
The biggest benefit is the grace period which allows you additional time to get your tax affairs in order and submit your return. The additional time is awarded without the risk of incurring penalties. In most cases, you can get up to six months as an extension. Most online tax service providers systems carry a guarantee that your extension will be accepted. It takes much less time to work out and complete the estimates required on the tax extension form than it would on your actual tax return. You do not have to submit any additional documentation with the application either which makes life much easier too.